nep-ltv New Economics Papers
on Unemployment, Inequality and Poverty
Issue of 2009‒06‒03
six papers chosen by
Maximo Rossi
University of the Republic

  1. Early Retirement and Inequality in Britain and Germany : How Important Is Health? By Jennifer Roberts; Nigel Rice; Andrew M. Jones
  2. Delay in Marriage and Income Inequality in Japan : The Impact of the Increased Number of Unmarried Adults Living with Their Parents on the Household Economy By Sawako Shirahase
  3. Other-Regarding Preferences, Spousal Disability and Happiness : Evidence from German Couples By Nils Braakmann
  4. Risk Attitudes and Wage Growth : Replication and Reconstruction By Santi Budria; Luis Diaz-Serrano; Ada Ferrer-i-Carbonell; Joop Hartog
  5. The Impact of Institutions, Culture, and Religion on Per Capita Income By Constanze Dobler
  6. Life Satisfaction among Rural Low-income Mothers: The Influence of Health, Human, Personal, and Social Capital By Sheila Mammen; Jean W. Bauer; Daniel Lass

  1. By: Jennifer Roberts; Nigel Rice; Andrew M. Jones
    Abstract: Both health and income inequalities have been shown to be much greater in Britain than in Germany. One of the main reasons seems to be the difference in the relative position of the retired, who, in Britain, are much more concentrated in the lower income groups. Inequality analysis reveals that while the distribution of health shocks is more concentrated among those on low incomes in Britain, early retirement is more concentrated among those on high incomes. In contrast, in Germany, both health shocks and early retirement are more concentrated among those with low incomes. We use comparable longitudinal data sets from Britain and Germany to estimate hazard models of the effect of health on early retirement. The hazard models show that health is a key determinant of the retirement hazard for both men and women in Britain and Germany. The size of the health effect appears large compared to the other variables. Designing financial incentives to encourage people to work for longer may not be sufficient as a policy tool if people are leaving the labour market involuntarily due to health problems.
    Keywords: health, early retirement, hazard models
    JEL: J26 I10 C23 C41
    Date: 2009
  2. By: Sawako Shirahase
    Abstract: The continuous decline in the fertility rate has been witnessed since 1980 in Japan. Japan’s total fertility rate in 2005 is 1.32, which is far below the replacement rate, 2.08. One of the main reasons for declining the fertility rate is the delay in marriage or even shy away from marriage among young adults. In this paper, looking at youth in terms of their relation to the household, we will examine the economic disparities of unmarried adults living with their parents in Japan in comparative perspective with Europe and U.S. The countries which I analyze in this paper are France, Germany, Italy, Sweden, U.K., U.S., and Taiwan, compared with Japan. The paper consists of two parts. First, I will examine economic disparities among households with unmarried adults, and second, the determinants of co-residence with their parents will be scrutinized. The degree of the Japanese youth unemployment rate is not as high as those in European countries, but it is commonly found that the youth tend to be targeted by economic downturns, and that they are exposed to high economic risk. Young unmarried people do not always live alone, but share their households with their family, mostly their parents. Less than 20 percent of unmarried adults live alone in Japan, and in Italy and Taiwan, its corresponding figures are even lower than that in Japan. The proportion of income derived from unmarried adults in the household economy is more or less negatively associated with family income. Therefore, unmarried adults are not always dependent on their parents in the household but there are cases in which unmarried adults are the ones who support the family income by living with their parents, particularly in low-income groups. The economic role of unmarried adult children in the household differs by the level of household economy. In determining if unmarried adults live with their parents, the economic factor is important for both men and women. Since their individual income is not high enough to have their independent households, they stay in their parental home. The most interesting finding in this analysis is on the gender role in living arrangement with their parents. Unmarried female adults are less likely to stay in their parental home if their mothers are at work, while there is no significant impact of mother’s work on their male counterparts. Unmarried daughters are like to be expected to take over the mother’s role in the households when she is in the labor force, so there is a gendered allocation of family role for unmarried adults. Thus, the economic levels of unmarried adults and the gender constrain in allocating family roles were important in determining the living arrangement with the parents.
    Keywords: Income Inequality, Co-residency of unmarried adults with Parents, Delay in marriage
    Date: 2009
  3. By: Nils Braakmann
    Abstract: This paper considers the impact of adverse health shocks that hit an individual’s partner on subjective well-being. Using data on couples from the German Socio-Economic Panel for the years 1984 to 2006, I compare the losses in well-being caused by own and spousal disability using panel-regressions. I find that women and to a lesser extent men are harmed by spousal disability which is consistent with the existence of other-regarding preferences within couples. The magnitude of effects suggests that spousal disability is about one quarter to one half as harmful as individual disability with larger effects being found for women.
    Keywords: Disability, subjective well-being, other-regarding preferences
    JEL: D64 I10 J14
    Date: 2009
  4. By: Santi Budria; Luis Diaz-Serrano; Ada Ferrer-i-Carbonell; Joop Hartog
    Abstract: We replicate Shaw (1996) who found that individual wage growth is higher for individuals with greater preference for risk taking. Expanding her dataset with more American observations and data for Germany, Spain and Italy, we find mixed support for the earlier results. We present and estimate a new model and find that in particular the wage level is sensitive to attitudes towards risk taking.
    Keywords: wage growth, risk, post-school investment
    JEL: J24 J30
    Date: 2009
  5. By: Constanze Dobler (Universität Hohenheim)
    Abstract: Despite many approaches of neoclassical and endogenous growth theory, economists still face problems in explaining the reasons for income differences between countries. Institutional economics and the deep determinants of growth literature try to depart from pure economic facts to examine economic development. Therefore, this article analyzes the impact of institutions, geography, and integration on per capita income. Concerning theoretical reasoning, emphasis is on the emergence of institutions and their effect on economic growth. However, institutions can appear in different shapes since political, legal, and economic restrictions are not the only constraints on human behaviour. Norms and values also limit possible actions. Therefore, a differentiation between formal and informal institutions is made. Informal institutions are defined as beliefs, attitudes, moral, conventions, and codes of conduct. Property rights are assumed to be the basic formal institutional feature for economic success. Despite their direct impact on growth through individual utility maximization, property rights also make a statement concerning the political and legal environment of a country. Regarding the regression analysis, different religious affiliations are used as instrumental variables for formal and informal institutions. The regression results affirm a crucial role of informal and formal institutions concerning economic development. However, a high proportion of Protestant citizens encourage informal institutions that support economic growth, while a high Muslim proportion of the population is negatively correlated with growth-supporting formal institutions.
    Keywords: culture, economic development, institutions, property rights, religion
    JEL: A13 H11 Z10 Z12 Z13
    Date: 2009–03
  6. By: Sheila Mammen (Department of Resource Economics, University of Massachusetts Amherst); Jean W. Bauer (Family Social Sciences Department, University of Minnesota); Daniel Lass (Department of Resource Economics, University of Massachusetts Amherst)
    Abstract: The satisfaction with life (SWL) among rural low-income mothers was assessed using a sample of 163 mothers who participated in a multi-state, three-year longitudinal study. Dependent variables included those that represented various forms of capital (health, human, personal and social) as well as the mothers’ levels of life satisfaction from prior years. Nearly two-thirds of the rural mothers were satisfied with their life in all three years. Their level of satisfaction appeared to be constant, however, such persistence had a time frame of only one year. In all three years, their depression score and the adequacy of their income had a significant effect on SWL. Their confidence as a parent and home ownership affected their life satisfaction during two years. Finally, their satisfaction with social relationships, age of the youngest child, and total number of children had an impact on their life satisfaction for one year.
    Keywords: Satisfaction with life, rural low-income mothers, health capital, human capital, personal capital, social capital, homeostatis
    JEL: I30 I31 I32 I39
    Date: 2009–02

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